If you’re considering buying a new home in Tampa Bay or the surrounding areas, you might want to start making full monthly payments on your credit cards. Recent changes in how credit bureaus report your information to mortgage lenders may make a difference in obtaining loan approval.
For decades, credit bureaus reported your payment history with creditors by showing your monthly payments as on time, late or in default. As long as you showed a positive payment history (making monthly minimum payments), had good credit and had an ability to pay off a loan—you would typically be approved for a mortgage.
Now, credit bureaus are reporting how much you are paying toward your debts. Your mortgage lender will have a chance to look at “trending data” that shows if you’re just making a minimum monthly payment—which could have a negative impact. If you’re making sure your credit card is paid in full each month—you may have an advantage.
With all the information lenders assess during the mortgage approval process, this detail could make a big difference. Mortgage lenders will review things such as your income, assets, credit score and willingness to pay a loan back, when determining your risk.
If you only meet your monthly minimums on a recurring basis, they may determine that your financial stresses are larger than you’re making them appear. However, if your history shows repetitive full payments, or even more than minimum payments on your loans, it may cancel out another negative determining factor.
Thinking of Moving to Tampa Bay?
If you’re looking for a home for sale in Tampa Bay or one of the surrounding areas, we’d love to help you.
Call us at 813-961-6000 or 727-584-8480. If it’s easier, you can even contact us online. We’ll begin our search right away.